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Some instability puzzles in Kaleckian models of growth and distribution: a critical survey

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  • Eckhard Hein
  • Marc Lavoie
  • Till van Treeck

Abstract

We tackle the issue of the possible instability of the Kaleckian distribution and growth model. Distinguishing between Keynesian and Harrodian instability, we review various mechanisms that have been proposed by critics of the Kaleckian model to tame Harrodian instability while bringing back the rate of utilisation to its normal rate. We find that the mechanisms that have been suggested are far from convincing. Therefore, we conclude that it may be premature for the critics of the Kaleckian model to dismiss the endogeneity of the rate of capacity utilisation in long-run growth equilibrium. Copyright The Author 2010. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

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  • Eckhard Hein & Marc Lavoie & Till van Treeck, 2011. "Some instability puzzles in Kaleckian models of growth and distribution: a critical survey," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(3), pages 587-612.
    • Handle: RePEc:oup:cambje:v:35:y:2011:i:3:p:587-612
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    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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